Homework Answers
1. The correct answer is A) The government increase interest rate.
Because increase in interest rate causes loan/credit costlier, due to which the Consumption and investment reduces. When consumption and investment reduce the aggregate Demand curve shift left ward from AD1 to AD2.
2. The correct answer is C. An increase in government expenditure and decrease in taxes.
Because increase in government expenditure increase the employment in the economy and decrease in tax increase in disposable income of the people, so this fiscal policy is most expansionary.
3. The correct answer is D. Crowding out.
The crowding out effect arises when government increase expenditure ( spending) either through raising tax or by raising borrowings.
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QUESTION 1 Price level AS P1 P2 AD1 AD2 Y2 Y1 Real national output Which of...
Use the following graph to answer the next question. Price Level AD2 AD AD Real Domestic...
Use the following graph to answer the next question. Price Level AD2 AD AD Real Domestic Output, GDP What combination would most likely cause a shift from AD, to AD2? A) An increase in taxes and an increase in government purchases A decrease in taxes and an increase in government purchases A decrease in taxes and a decrease in government purchases D) An increase in taxes and no change in government purchases
Figure AS-AD.1 AD2 AD1 AD3 Real Domestic Output, GDP 13) In Figure AS.AD.1, what combination would...
Figure AS-AD.1 AD2 AD1 AD3 Real Domestic Output, GDP 13) In Figure AS.AD.1, what combination would most likely cause a shift from ADI to AD2? A) A decrease in taxes and an increase in government purchases B) An increase in taxes and an increase in government purchases 14) Other things being equal, the effects of an increase in the price of orange juice would best be represented by a(n): A) upward movement along the demand curve for orange juice. B)...
#6 Consider an economy that is operating at the full-employment level of real GDP with MPC=0.7...
#6 Consider an economy that is operating at the full-employment level of real GDP with MPC=0.7 MPC=0.7 . The short-run effect on equilibrium real GDP of a $50 billion increase in government spending ( G G ), balanced by a $50 billion increase in taxes, is...…………. abillion (Increase or Decrease) in real GDP. #7 Suppose that the MPC in a country is 0.9. Complete the following table by calculating the change in GDP predicted by the multiplier process given each...
AVE Pr #2 • As •AS P2 Ez Pi Pi P2E El - ADI 'AD2 AD...
AVE Pr #2 • As •AS P2 Ez Pi Pi P2E El - ADI 'AD2 AD - - "ADZ - Q1 Q2 + Q2 Qi Y Pra AS, Pra Asr •ASI •AS Pi Ei Pzt Ez Pr. 7 EV Pita TEL 'AD AD Q1 Q2 Y Qq Qi 저 #3 #4 Question 13 (2.5 points) Which diagram illustrates the goal of The CARES Act of 2020? Graph: #1 #2 #3 #4 none of the above Question 14 (2.5 points) Suppose...
QUESTION 1 Which of the following is an example of an automatic fiscal policy stabilizer? a....
QUESTION 1 Which of the following is an example of an automatic fiscal policy stabilizer? a. Tax revenues fall as real GDP decreases. b. Congress decides to cut spending on national defense. c. Congress cuts individual income tax rates. d. Tax revenues rise after Congress raises corporate tax rates. QUESTION 7 When a country's economy is producing at a level that is less than its potential GDP, the standardized employment deficit will show a ________ than the actual deficit. a....
i need answers as soon as possible QUESTION 12 In the aggregate expenditure model if the...
i need answers as soon as possible
QUESTION 12 In the aggregate expenditure model if the government of Pasedonia decides to increase government spending by $ 100 billion and to finance this increase in government spending the government of Pasedonia increases taxes by $ 100 billion what effect will this have on the economy? (assume MPC 0.75) O A GDP stays the same B. GDP increases by $ 100 billion OC. GDP will increase by $ 400 billion OD. GDP...
16. to the wealth effect, an increase in the price level causes ease in real wealth and more purchases b. An incr C. A decrease d. rease in real wealth and fewer purchases se in real wealth and f...
16. to the wealth effect, an increase in the price level causes ease in real wealth and more purchases b. An incr C. A decrease d. rease in real wealth and fewer purchases se in real wealth and fewer purchases A decrease in r price level increase tends to reduce net exports, thereby reducing the amount of real goods a. The b. The international banner effect C. rvices purchased in the U.S. Economists refer to this phenomenon as international wealth...
QUESTION 12 In the aggregate expenditure model if the government of Pasedonia decides to increase government...
QUESTION 12 In the aggregate expenditure model if the government of Pasedonia decides to increase government spending by $ 100 billion and to finance this increase in government spending the government of Pasedonia increases taxes by $ 100 billion what effect will this have on the economy? (assume MPC=0.75) O A GDP stays the same OB GDP increases by $ 100 billion OC. GDP will increase by $ 400 billion D.GDP will decrease QUESTION 13 An example of an automatic...
1. Suppose the federal government observes an increase in gross investment. Examine this event in terms of the aggregate...
1. Suppose the federal government observes an increase in gross investment. Examine this event in terms of the aggregate demand and aggregate supply model. a. The increase in gross investment will cause (Click to select) [an increase in aggregate demand / a decrease in short-run aggregate supply / an increase in short-run aggregate supply / a decrease in aggregate demand]. b. This will lead to (Click to select) [a decrease / an increase] in the price level and (Click to select)...
1. Suppose the federal government observes a decrease in net exports. Examine this event in terms...
1. Suppose the federal government observes a decrease in net exports. Examine this event in terms of the aggregate demand and aggregate supply model. a. The decrease in net exports will cause (Click to select) [a decrease in short-run aggregate supply / an increase in short-run aggregate supply / an increase in aggregate demand / a decrease in aggregate demand]. b. This will lead to (Click to select) [a decrease / an increase] in the price level and (Click to select)...
Use the following graph to answer the next question. Price Level AD2 AD AD Real Domestic Output, GDP What combination would most likely cause a shift from AD, to AD2? A) An increase in taxes and an increase in government purchases A decrease in taxes and an increase in government purchases A decrease in taxes and a decrease in government purchases D) An increase in taxes and no change in government purchases
Figure AS-AD.1 AD2 AD1 AD3 Real Domestic Output, GDP 13) In Figure AS.AD.1, what combination would most likely cause a shift from ADI to AD2? A) A decrease in taxes and an increase in government purchases B) An increase in taxes and an increase in government purchases 14) Other things being equal, the effects of an increase in the price of orange juice would best be represented by a(n): A) upward movement along the demand curve for orange juice. B)...
AVE Pr #2 • As •AS P2 Ez Pi Pi P2E El - ADI 'AD2 AD - - "ADZ - Q1 Q2 + Q2 Qi Y Pra AS, Pra Asr •ASI •AS Pi Ei Pzt Ez Pr. 7 EV Pita TEL 'AD AD Q1 Q2 Y Qq Qi 저 #3 #4 Question 13 (2.5 points) Which diagram illustrates the goal of The CARES Act of 2020? Graph: #1 #2 #3 #4 none of the above Question 14 (2.5 points) Suppose...
i need answers as soon as possible
QUESTION 12 In the aggregate expenditure model if the government of Pasedonia decides to increase government spending by $ 100 billion and to finance this increase in government spending the government of Pasedonia increases taxes by $ 100 billion what effect will this have on the economy? (assume MPC 0.75) O A GDP stays the same B. GDP increases by $ 100 billion OC. GDP will increase by $ 400 billion OD. GDP...
16. to the wealth effect, an increase in the price level causes ease in real wealth and more purchases b. An incr C. A decrease d. rease in real wealth and fewer purchases se in real wealth and fewer purchases A decrease in r price level increase tends to reduce net exports, thereby reducing the amount of real goods a. The b. The international banner effect C. rvices purchased in the U.S. Economists refer to this phenomenon as international wealth...
QUESTION 12 In the aggregate expenditure model if the government of Pasedonia decides to increase government spending by $ 100 billion and to finance this increase in government spending the government of Pasedonia increases taxes by $ 100 billion what effect will this have on the economy? (assume MPC=0.75) O A GDP stays the same OB GDP increases by $ 100 billion OC. GDP will increase by $ 400 billion D.GDP will decrease QUESTION 13 An example of an automatic...
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